IR35- How Can I Avoid It?

There are several ways you can avoid IR35 - although they may not be palatable to you, or your customers.

First, you can avoid IR35 altogether by rewarding yourself for all work done in a form subject to PAYE. IR35 was intended to stop the avoidance of tax and NICs through the use of intermediaries - if there is no avoidance, there will be no IR35 liability.

Second, you could give up your current arrangements and seek to join the staff of your main customers. This might get around IR35, but it will limit your options and increase the costs of your customers (through NIC, holiday pay, etc.)

Finally you could examine and, where appropriate, re-write your contracts. A great deal of care must be taken, not only to ensure that the terms of your contract(s) are such that IR35 will not apply, but also to ensure that they will stand up to HM Revenue & Customs scrutiny. In particular, HM Revenue & Customs might seek to prove that although your contract might on the face of it be one to which IR35 could not apply, in fact the manner in which your relationship with your client operated was one which fell within IR35. In this case HM Revenue & Customs will insist that IR35 be applied to earnings under the contract.

If you wish to put your contracts to the IR35 test, HM Revenue & Customs will give its views - but remember that this view will be based on the information provided. If, in fact, IR35 should apply, HM Revenue & Customs will not be bound by any previous decision.